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Round-up of Carneys's session before the Lords

18.04 Reuters has done a good round-up of the highlights of Carney's light toasting (definitely wouldn't call it a grilling) by the House of Lords.

ON BRITAIN'S ECONOMIC RECOVERY AND THE BOE'S POLICIES

Inflation has fallen back to within a hair's breadth of the 2pc target and the recovery has finally taken hold.

It is welcome that the economy is growing again, but a return to growth is not yet a return to normality. Nearly 1 million more people are out of work than in the years before the financial crisis, and the economy remains 2.5pc smaller than it was in 2008.

The recovery has some way to run before it would be appropriate to consider adjusting the exceptional level of monetary stimulus that we continue to provide to the economy.

ON THE UK HOUSING MARKET

In its most recent Financial Stability Report, the FPC (the Financial Policy Committee) paid particular attention to the risks posed by the recovery in the UK housing market. These risks are manageable and are being managed.

By acting in a graduated and proportionate way, we are reducing the likelihood that larger interventions will be needed later, and we are allowing the broader economy to continue to receive the stimulus it needs, for as long as its needs, to sustain the recovery.

ON FORWARD GUIDANCE

My experience, having met with more than 300 businesses around the country, is that business people understand forward guidance well.

There is a distinction in terms of the expectations of the economists who follow the BoE of when that 7 percent threshold will be reached, and when they expect the BoE to raise interest rates. They expect that to be at least a quarter later, in some cases two quarters.

That shows a recognition that there is discretion that extends beyond the 7pc threshold.

The lower volatility in the short end shows ... a much sharper and improved expectation relative to the period before forward guidance that we would not be raising interest rates in the short term.

Those expectations have been really tested because the economy has recovered so strongly in the period over which we've had forward guidance in place.

ON IMPACT OF WEAK EUROZONE ECONOMY

The headwind from very weak demand - likely very weak demand for some time - from our major trading partner Europe, the combination of all that could reduce the potential growth of this economy for some time. This is less likely to be a robust, sustained recovery.

ON INVESTMENT AND PRODUCTIVITY

The measured figures for investment and productivity have been lacklustre and have not yet picked up.

I would say on the investment side we - meaning the MPC - take the official statistics with a note of caution because there are some inconsistencies in the statistics with broader survey measures and other indicators of investment intentions.

But the broad point remains absolutely correct, in that there has not been a sharp upturn yet on business investment and certainly measured productivity we see as lacklustre and the level of productivity remains at levels before the crisis.

ON QUANTITATIVE EASING

Barring any additional shocks to the economy, (we had come) to a period -at least in my opinion - of the end of additional quantitative easing.

There is a much greater demand of banks for central bank assets than there was prior to the crisis, so it is unlikely that the size of our balance sheet in steady state would return to the same size of our balance sheet previously, relative to the size of gross domestic product.

ON THE TIMING OF NEW LEVERAGE RULES FOR BANKS

By the end of 2014 we would be in a position both to have finished the review, made recommendations, taken all of this and apply it to the UK institutions.

Are banks' reporting good enough?

17.42 Final question - do banks report their results accurately.

Short answer is yes, Carney says, but doesn't mean it gives prudent results.

Carney goes on to say that he supports the work of enhanced results, with more disclosures.

He says there does not to be improvements to IFRS (international reporting standards).

As with everything, it can be substantially improved.

And that's it. Carney is free to make it to his carol service (the Bank of England carol service he points out, so he is still working). I don't like his chances of getting from parliament to the Old Lady of Threadneedle Street in 30 mins (unless he takes the tube).

Leverage ratios

17.31 Lord Lawson, asks in a rather long winded way, about leverage ratio.

Carney says FPC will conduct a review and will be affected by Basel, as to when it will apply a leverage ratio.

But he says he hopes to be able to set a leverage ratio for UK banks by the end of 2014.

Carney at risk of missing his carol service

17.21 Time check on the carol service. Carney is doing his reading at 6.10pm and it takes 20 minutes to get there (although not sure if he is used to the horrific London traffic during rush hour yet), so just time for a few more questions.

Carney asked if banks can be too big too manage.

Yes, I think we have seen that, he says.

Complex structures and poor governance and management has made that the case, he adds.

Measures to stop housing bubble

17.11 Carney is asked about housing now.

He says that he is focusing on mortgage underwriting standards and capital requirements to stop a housing bubble.

But when that happens is one of the major challenges facing the bank, he adds.

Forward guidance - effect on economic behaviour

16.39 Carney is asked to respond to criticism that with discretion of three knock outs it doesn’t add to clarity of what MPC is doing has have same freedom as before.

He says that in the background to his statement, he provided some statistical analysis on volatity, which looks at an 18 month horizon which is lower now than prior to introduction to forward guidance.

He also argues that short-term interest rates have been little affected.

16.28 Not the most interesting of hearings and its been getting technical a bit.

Some of the interesting bits:

&lt;noframe&gt;Twitter: Live Squawk - BoE&amp;rsquo;s Carney: Signs that UK natural rate of interest is becoming less negative, Barring further shocks, UK is nearing end of additional QE&lt;/noframe&gt;

&lt;noframe&gt;Twitter: zerohedge - Carney: "barring further shocks, the UK has come to the end of quantitative easing"... famous last words&lt;/noframe&gt;

16.14 Lord Lipsey asks if Carney is confident if we can return to the historic growth rates seen in the medium to long term.

The initial phase of the recovery has been concentrated on household spending. The measured figures for investment and productivity have been lacklustre and have not yet picked up.

On the investment side, the MPC takes official statistics with a note of caution as there is some inconsistency with other measures, but the broad measure remains correct in that there has not been an uptick.

Looking further ahead he says:

One of the challenges we are all facing in developing economies is how long is the hangover from financial crisis? How long will it take to repair the financial system, get household balance sheet s back in order.

These headwinds will persist for some time.

On top of this, he says, the UK is suffering from weak deman from its major trading partner - Europe.

The combination could reduce potential growth of this econom for some time.

What lessons has he brought over from Canada?

16.09 Carney is asked what experience he has brought over from Canada.

He says the crisis here reinfoces a core lesson from the crisis in Canada which is the importance of having a leverage ratio.

Why did Canada faired as well as it did [during the crisis] was the effectiveness of having a true leverage ration in run up to the crisis.

Passes over to questions

16.05 Chairman of the committee asks "have things turned out as you expected or have there been any unanticipated experiences?

Starting with expectations, Carney says:

I had high expectations of staff at the bank which have been met.

Secondly, the strength of the recovery has exceeed my expecations.

When I arrived it had only been recenlty clear that the UK had not entered into a double or triple-dip recession. I would say that the recovery has been stronger than the bank's forecast, but in my view bank got direction of recovery.

The effect of forward guidance

16.01 He goes on to say that the recovery has some way to run before it would be appropriate to consider adjusting the exceptional level of monetary stimulus that we continue to provide to the economy.

In recognition of that, the Monetary Policy Committee introduced forward guidance in August, making clear that we will not even consider raising Bank Rate at least until the unemployment rate reaches 7pc.

That gives households and businesses the confidence that interest rates won’t go up until jobs, incomes and spending are recovering at a sustainable pace

Carney kicks off by making a statement

15.58 He's grateful for the opportunity to give evidence. He says the sessions in parliament are the "cornerstone" of the central bank's accountability.

Inflation has fallen back to within a hair’s breadth of the 2pc target and the recovery has finally taken hold. The news about the strength of the recovery in the United Kingdom has consistently surprised on the upside and by more than in either the United States or the Euro

It is welcome that the economy is growing again, but a return to growth is not yet a return to normality. Nearly one million more people are out of work than in the years before the financial crisis, and the economy remains 2.5pc smaller than it was in 2008.

Delay

15.53 Things haven't kicked off yet in parliament. I don't think. The live feed isn't up yet

.... Okay we have a picture but now all you can head is that beep noise that used to play back in the day when TV wasn't 24 hours.

Greece to get next tranche of bailout

15.44 While we wait for Carney (these things are always delayed), the eurogroup has just confirmed that Greece has met its four milestones in the third review of its bailout programme and will get the fifth installment of its bailout, which amounts to €500m.

I am confident that the Greek authorities will swiftly conclude their discussions with the Troika institutions in order to allow for a completion of the ongoing review of the country’s economic adjustment programme.

The milestones met include:

• Greece has placed over 12 500 public employees in the mobility scheme as part of the strategy to make the public administration more efficient.

• Second, Greece has taken adequate measures to significantly restructure or liquidate three state-owned companies which were intended for privatisation.

• Third, a Code of Lawyers was adopted to enhance the functioning of this regulated profession.

• Finally, Greece took the required steps to improve the financial situation of the two main water companies, by clearing government arrears, in order to facilitate their privatisation.

Carney to appear before the lords

15.26 Over in Westminster, Mark Carney, the Governor of the Bank of England, is having his debut session in front of the Lords Economic Affairs Committee this afternoon.

That will start in about 10 minutes and we will be covering it live here. Or if you want to watch it live you can do so by clicking here.

Areas the Committee will cover with Dr Carney include:

• What is his assessment of the UK's medium term economic prospects?

• Whether the realities of serving as Governor of the Bank of England have matched his expectations and what lessons he is applying that he learnt from his time as Governor of the Bank of Canada.

• How he expects his introduction of forward guidance on monetary policy (announcing that interest rates would not change while unemployment remains above 7%) to influence economic behaviour?

• Is there a risk that using unemployment as the signal to raise interest rates could be too late for effective control of inflation?

• Is there a conflict between the Bank’s scrapping of the Funding for Lending scheme which supported mortgage lending and the expansion of the government’s Help to Buy scheme?

• Would the Bank’s financial stability objective be easier to meet if there was a full separation between retail and investment banking?

• Should bankers be subject to full professional standards in the same way as doctors and lawyers?

• What is his view on Scottish Government’s aim set out in its White Paper to retain sterling as the currency of an independent Scotland?

Mark Carney

Bloomberg to let banks monitor trader chat

15.14 Bloomberg is introducing a new tool that allows bank compliance officers to monitor chat between traders, in a bid to reverse a trend where lenders have banned their staff from using the instant messaging tool on their Bloomberg terminals, according to the Financial Times.

A growing number of banks are looking to ban their staff from using the chat function on their Bloomberg terminals after instant messages between traders threw up a treasure trove of evidence that appeared to show traders plotting to rig key interest rates, leading to massive fines against major banks including Barclays, Royal Bank of Scotland, UBS and interdealer broker ICAP.

Bundesbank deputy frontrunner for ECB board seat

14.29 Sabine Lautenschlaeger, vice president at the Bundesbank, tops the list of names being proposed by Germany to replace Joerg Asmussen on the ECB executive board. Mr Asmussen's surprise departure was announced over the weekend when Angela Merkel, German Chancellor, gave the details of her cabinet, which included the ECB board member as a junior labour minister.

JP Morgan and Deutsche Bank latest to ban multi-trader chat rooms

14.09 JP Morgan and Deutsche Bank have become the latest banks to ban the use of chat rooms by traders, according to Reuters. Chat between traders has been used as key evidence against banks accused of maninpulating Libor, the key interbank lending rate. Barclays, Citigroup, RBS and UBS have also reportedly issued a ban on traders using chat rooms.

Hayes pleads not guilty to charges of manipulating Libor

14.00 Former UBS trader Tom Hayes has pleaded not guilty to charges he sought to rig Libor, a key interbank landing rate. The 34-year-old has been charged with eight counts of conspiracy to defraud between 2006 and 2010 as part of a global inquiry stretching from the US to Asia. Former RP Martin brokers Terry Farr and James Gilmour also pleaded not guilty.

UK to launch shale licensing round in summer

13.45 Britain's latest licensing round to allow companies to explore for shale gas will be launched in early summer, energy minister Michael Fallon has said. Mr Fallon said he expected the number of onshore licences to double this time round. It will be the UK's 14th tender for onshore areas, and will mark an end to the four-year suspension on licencing due to earth tremors caused by shale exploration in Lancashire, north-west England.

Greece out of recession next year, says central bank

13.27 The debt-laden country has said it will exit recession next year after six consecutive years of contraction, according to its central bank.

In its latest forecasts the Bank of Greece said:

2014 will be the first year of positive growth, after six consecutive years of recession.

The Greek government has predicted the economy will grow by 0.5pc in 2014.

The recovery will have "a favourable impact on employment" with the average annual unemployment rate expected to decline over the year, the bank projected.

A healthier international context, a slower rate of decline in consumption and a stepping-up of privatisations demanded by Greece's international creditors should help get the struggling economy back on its feet, the central bank judged.

However, the bank warned that the main risk remained a splintered political climate at a time when "what is needed is the exact opposite: the coming together of social and political forces for a national policy for exiting the crisis and returning to growth."

UK and Spain drive strong car sales in EU

12.55 Demand for new cars in the EU has grown for the third consecutive month.

A total of 938,021 new passenger cars were registered in November, data from the European Automobile Manufacturers' Association showed, a 1.2pc gain on sales the previous month.

However, from January to November 2.7pc less new cars were registered than in the first eleven months of last year.

The gain was powered by demand in Britain, which was up 7pc and in Spain (+15.1pc).

But the core eurozone countries were hit, with new registrations down 2pc in Germany and 4pc in France.

Source: EAMA

Source: EAMA

Big four hit after latest Kantar data

12.36 Back in the FTSE 100, the release of market share data from Kantar, showing the growing popularity of discounters Aldi and Lidl, has hit the listed supermarket companies. J Sainsbury is down 2.7pc, Tesco has fallen 1.3pc and Wm Morrison is off 0.9pc.

Tesco applies to open Indian supermarkets

12.28 Tesco has applied to open supermarkets in India, one of the first global retailers to try to enter the market since Delhi removed foreign investment barriers last year.

Tesco has teamed up with Tata Group for the stores. The two retailers have worked together before as Tesco supplies 80pc of the goods in Tata's 16 Star Bazaar and Star Daily stores in southern and western India.

Today, we're making an application to develop a multi-brand retail business in India.

If it were successful, it could open the way to Tesco investing directly and forming a partnership from our existing relationship with the Tata Group.

If the application was successful, the two firms would enter a 50-50 partnership to develop multi-brand retail stores, Tata's retail business Trent Hypermarket said.

We believe that our understanding of the Indian market coupled with Tesco's unparalleled global retail expertise will allow us to leverage the tremendous potential of the market to the benefit of all stakeholders.

Last year New Delhi moved to open up the retail sector to foreign companies as part of steps to boost a sharply slowing economy.

Foreign supermarkets can hold stakes of up to 51pc in multi-brand retailers, but rigid conditions still imposed by the government have held many back from applying.

Tesco plans to open stores in India

IoD: Airport shortlist welcome, but “hard work is just beginning”

12.11 That is the view of the Institute of Director's chief economist Graeme Leach, who says progress is being made, but adds that the UK is "still a long way" from building the runways it needs".

He says Heathrow "must be the first choice for a new runway".

We welcome the Airports Commission’s shortlist of options, which correctly include expanding the UK’s hub airport.

[Heathrow] is full now. It cannot take on new routes to major cities in China and other developing economies, holding back international trade, inward investment and tourism. Gatwick will also run out of capacity soon, and will need another runway, but the priority must be Heathrow.

The shortlist is a step along the way, but the hard work is just beginning.

We must start now to build a political consensus on the need for more airport capacity and design suitable compensation schemes for residents affected by new runways.

Leach: Heathrow must be first choice

Property bubble concerns continue to grow

11.41 CityIndex's chief market strategist Joshua Raymond has pointed out that after today's figures from ONS, which show house prices up 5.8pc in the year (see 10.15), takes the house index to above its peak in 07/08, while mortgage approvals are still well down.

EU accounting changes to add £30bn to UK public debt

11.27 Not such good news for the UK now. Britain's public debt is likely to be revised up by £30bn next September due to changes to EU guidance on public accounts.

That warning comes from the ONS who have noted that Network Rail, the state-owned company that manages Britain's railway network, will be reclassified as a public-sector company rather than as a private one.

There are also some question marks over Royal Mail and the transfer of its historic pension assets and liabilities to the government prior to its privatisation.

ONS says there will need to be further assessment on this issue, but it is likely that it will add £9bn to public sector net borrowing recorded for April 2012.

Insurers drop after Commission report

11.12 Back in the stock market, shares in motor insurers Admiral, down 2.1pc, and esure, off 2.9pc, are under pressure after the Competition Commission published its provisional report into the industry and said it wanted to cut the cost of car insurance. The final report is due next September.

German investor confidence jumps to 7 and-a-half-year high

11.03 Some very good news for Germany this morning, where a survey has found that German investor confidence jumped to a seven-and-a-half-year high in December on the back of hopes of an economic upturn in Europe.

The ZEW institute said that its confidence index, which measures investors' expectations for the next six months, rose to 62 points from 54.6 in November.

That was the best reading since April 2006 and far exceeded the more modest rise to 55 points anticipated by economists.

ZEW's head, Clemens Fuest, said that despite disappointing recent industrial data, investors expect further improvements in Germany and the 17-country eurozone in 2014.

Pound drops after inflation hits four-year low

10.52 The pound has dropped against the dollar and the euro.

Christopher Vecchio, Currency Analyst at DailyFX, notes:

Consumers maintain their belief that higher inflation will materialize, but it’s not translating into the data thus far.

On the back of a stronger pound through the 3Q and into the 4Q, UK consumers have seen their purchasing power being preserved now that inflation is coming in line with the Bank of England’s medium-term target of +2pc.

If the Federal Reserve comes out and strikes a more hawkish than anticipated tone tomorrow, the GBPUSD, as a top performer in the second half of 2013, would be a prime candidate for a yearend unwind.

We’re watching $1.6260 to the downside as the first level of support (former resistance in September-November channel, 1.5880-1.6260).

Pound against the dollar in Tuesday's trading. Source: Bloomberg

Pound against the euro in Tuesday's trading. Source: Bloomberg

House prices by region

10.35 Here you can see the annual change in house prices in each country and region.

All are now seeing growth.

Source: ONS

London sees fastest increase in house prices

10.22 Perhaps not unsurprising that London continues to see the fastest rise in house prices. Prices rose a staggering 12pc over the year.

The next closest was a 4.8pc rise in the East of England and 4.7pc in the East Midlands.

Source: ONS

UK house prices rise 5.5pc

10.15 In the 12 months to October 2013 UK house prices have increased by 5.5pc, up from 3.8pc in the year to September.

That is the steepest increase in prices in more than year three.

All countries in the UK saw prices rises, according to the figures from the ONS.

England saw the biggest rise in prices - up 5.7pc, followed by a 4.8pc rise in Northern Ireland, 3.3pc in Scotland and 2pc in Wales.

Source: ONS

Inflation still three times higher than earning growth

09.59 Inflation has come down from a peak of 2.9pc in June and is now on the brink of getting down to the Bank of England’s 2pc target rate.

Howard Archer, chief UK & European economist at IHS Global Insight, says this eases the squeeze on consumers, which is "helpful" to growth prospects.

But, he noted, inflation is still running at three time the average annual earnings growth 0.7pc in the three months to September.

This maintains doubts as to whether consumers will be able, or willing, to keep spending at a strong clip over the coming months. If they do, the concern is that it will be through many of them building up debt, although rising employment is helping matters.

While earnings growth seems likely to pick up over the coming months, the increase will most probably be gradual so it could well take to mid-2014 before earnings growth finally overtakes consumer price inflation.

Fruit and veg see biggest price drop

09.46 The decline in the annual inflation rate was partly due to fruit and vegetable prices and base effects from utility- price increases in November 2012.

The first of the 2013 energy- price hikes will be captured in the December inflation data, the statistics office said.

Source: ONS

Inflation hits a four-year low

09.38 The fall in consumer prices means inflation is now at a four-year low.

A spokesperson for the Treasury says this shows that that government's long-term economic plan is working.

All parts of the economy are growing, the deficit is falling and jobs are being created. But the job is not done and the government will go on taking the tough decisions needed to create a sustainable recovery for all.

Source: ONS

UK inflation slips to 2.1pc

09.31 Britain's CPI inflation has slipped to 2.1pc, lower than the 2.2pc that had been expected.

Key UK data

09.08 The key UK economics news out this morning will be inflation for November at 09.30.

It is widely expected to remain at multi-month lows on an annualised basis of 2.2pc. The last time CPI was below this level was back in December 2009 when it was at 1.9pc.

FTSE 100 slides lower as Fed looms

08.48 Despitejumping 1.3pc on Monday, the FTSE 100 is on the slide again this morning, having fallen 32 points, or 0.5pc, to 6,490, as the latest policy meeting of the US Federal Reserve draws nearer. The summit, which starts today, will finish tomorrow and some investors are expecting the central bank to announce at the conclusion of the meeting that its $85bn-a-month quantitative easing programme will be scaled back.

Boris says Thames Estuary would be cheaper than Sir Howard estimates

08.34 Boris Johnson, Mayor of London, has just been on Radio Four's Today Programme. He is cheerful about today's report, as it leaves open his option of an airport in the Thames Estuary, even if it did not appear on the official shortlist.

It's very very good news that there's a very clear choice now. It's basically Heathrow or you go with a new option. That's pretty clear from what's [Sir Howard] has been saying. Gatwick alone won't do the job. The airlines will still want to go to Heathrow. Our contention is that building another runway in the West London suburbs is crackers. You will feed the beast and by the time you buy a third runway by 2029, 2030, there'll be insatiable demands for a fourth runway

He argues that his own proposal for a new hub airport in the Thames Estuary would cost much less than Sir Howard estimates:

I don't think it costs anything like what he's been saying. The transport infrastructure comes in at about £20bn. Then you've got the cost of the airport, but we think that's easily financed by international investment. What is being proposed at Heathrow is not some oven-ready peasy scheme. They are talking concreting over M25, closing it for at least five years, doing major realignments of the M4 and A113. Tens of billions.

My question to the world is why on earth entrench a huge planning error and expand Heathrow?

The option of the estuary can probably be taken forward and financed. The thing we're leaving out of this equation is the huge regeneration benefits to the east of city.

The Mayor also rejects Howard Davies' argument that it's wrong to only think in terms of hub airports:

If you look at what everyone else in Europe is doing as well as Dubai, China, Istanbul. As sure as eggs are eggs, if and when we were to build a third runway at Heathrow it would be accompanied by shrill and vociferous clamour for another runway

I reject all of [the options on the shortlist] of course. The least endurious to Londoners and to everybody in the country would be to have another runway at Gatwick. I think the difference is that it won't deliver the competitive boost the country needs. If you expand Gatwick whilst retaining Heathrow as your hub there is no power on earth except legal coercion that's going to get the airlines to migrate from Heathrow to Gatwick. I'm doubtful that that would work as long as Heathrow remains the hub.

It would be a grievous error [to press ahead with Heathrow expansion]. It's the wrong thing for the country. This is a historic decision. I believe in going on winning fights instead of flancing out. I believe this will be won by the iron logic of the case. You cannot continue to expand a 21st Century hub in the middle of the western suburbs of the greatest city on Earth.

Davies: Boris is wrong to make the debate about hub airports

07.47 Sir Howard adds that Boris Johnson's view that the UK needs a hub airport is not right.

I don't think [Boris] has got this right. The question is not whether you have a hub but how big your hub can be.

We've got a constellation of airports in London- the question is where the balance is going to rest. Almost all growth is coming in low cost carriers. Legacy airlines have fallen in the number of flights they do. If it's new routes being developed I'm sure that's going to be at Heathrow. But will all flights to New York continue to be at Heathrow? The issue is the balance. To call it a hub or no hub debate suits his argument but it's not right.

He also says that Stansted has been ruled out for expansion as it already has lots of spare capacity, and is less popular than Gatwick:

Until 2019 there is a prohibition to development at Gatwick. [In earlier reviews] if you wanted to expand point to point, Stansted seemed like best one. But airlines have gone to Gatwick rather than Stansted. ]

[Stansted] has lot of room to expand with existing runway, Stansted is only half full. The pattern of demand has shown Gatwick is much more popular than Stansted. But it is important that Stansted's capacity is used in the meantime.

Boris Johnson says the UK needs a hub airport. Photo: PA

Davies: Boris Island feasibility will be decided by next election

07.45 Sir Howard Davies has just been on Radio Four's Today Programme. He says that Boris Island will be firmly on or off the table by the 2015 election, after the Commission does more detailed work on the proposal:

We've gone backwards and forwards on this. It's quite difficult to compare a proposal by a current airport operator with a much more extensive proposition for shifting the economic geography of South East England. There's a whole series of issues related to economic development which are difficult to assess.

We have said we are going to do some very specific pieces of work, for example looking at environmental feasibility, access, and whether airlines would move to it. We'll do those pieces of work over the summer and report on it.

Sometime next year we will decide whether this is an option. We will not leave this uncertain by the next election.

Tablet computers give Dixons early Christmas present

07.34 Britain's rush to buy tablet computers has sparked a surge in sales for Dixons Retail, the owner of Currys and PC World. Graham Ruddick has more details:

The retailer said that UK like-for-like sales rose by 9pc in the six months to the end of October, despite consumers remaining under pressure.

The growth in sales means that Dixons posted underlying pre-tax profits in the first-half of its financial year for the first time in six years.

The recovery represents a significant turnaround for Dixons, whose future on the high street was in doubt following the collapse of Lehman Brothers and the subsequent turmoil on the high street.

The retailer has been boosted by the demise of its main rival Comet a year ago, but also a corporate drive to improve customer service and strike deals with suppliers that allows its stores to take on Amazon on prices and offer exclusive products.

Heathrow boss: a decision which doesn't stick is worthless

07.19 Colin Matthews, boss of Heathrow Airport, has just been on Radio Four's Today Programme, reacting to news that two of the three proposals on Sir Howard Davies' shortlist are for Heathrow expansion. He cheers the outcome:

It's good news for the UK economy that the commission is recognising the importance of connections around the world. It's important that business can get to parts of the globe where economies are growing.

Options at Heathrow and the Mayor's suggestion underline the need for a hub. We think our proposal is the best and we've worked on it hard - we'll look at every option.

Moving west does make the airport a bit quieter. We can make Heathrow continue to be quieter with three runways in the future.

And urges politicians to take the recommendations seriously:

We should let the Commission finish its work. A decision which doesn't stick is worthless and ultimately there will need to be political will to look at the report and make a decision.

The mayor is right to argue this country needs a hub. [But] It's right for the country if its at Heathrow. We need to address the concerns of local people and make the airport quieter

Paris and Amsterdam are trying to eat our lunch. It is important and that's why what was an option close to being ruled out is on the shortlist today.

It's any option that is chosen is genuinely difficult. It does take this independent commission to do the work seriously. It will need broad political support - if it becomes a party issue it will be difficult.

Colin Matthews, BAA chief executive. Photo: ITN

Dixons reports first half-year profit in six years

07.09 Meanwhile, Dixons Retail has reported its first underlying half year profit in six years.

&lt;noframe&gt;Twitter: steve hawkes - Dixons Retail reports underlying half year profit for the first time in six years.. A victor in the Darwinian struggle on the high street&lt;/noframe&gt;

Davies says too much uncertainty surrounding Boris Island

07.07 Sir Howard has said the Thames Estuary Airport proposal - aka Boris Island - has not been completely ruled out, but will need separate consideration.

&lt;noframe&gt;Twitter: Kamal Ahmed - Sir Howard Davies: "The Commission has not shortlisted any of the Thames Estuary options because too many uncertainties" &lt;a href="https://twitter.com/search?src=hash&amp;q=%23UKairports" target="_blank"&gt;#UKairports&lt;/a&gt;&lt;/noframe&gt;

&lt;noframe&gt;Twitter: Laura Kuenssberg - So Boris Island could in theory go back on the list... But seems v unlikely now it's not made the short list&lt;/noframe&gt;

&lt;noframe&gt;Twitter: Andrew Neil - Boris Island still on option but on critical list.&lt;/noframe&gt;

A new runway will be needed by 2030

07.05 Sir Howard Davies's report says the UK will need two new airports by 2050, one of which should be built by 2030.

Boris Island and Stansted out

07.01 Sir Howard's shortlist has ruled out Boris Island and new runways at Stansted - favouring the idea of two new runways at Heathrow and one at Gatwick.

It reports that Sir Howard will formally identify Heathrow as the leading contender for new runways, in a move that is bound to stoke poliltical angst - when the coalition came to power in 2010, it scrapped the former Labour government's plan for a third runway at the West London airport.

• The Times (£): Shares on Wall Street staged a “Santa rally” yesterdayafter America’s industrial production rose above the pre- financial crisis peak for the first time and traders shrugged off fears over tomorrow’s crucial meeting at which the US Federal Reserve will consider whether to taper its $85 billion-a-month stimulus programme